Benefits and Compensation

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In the process of recruiting efficient employees to businesses, the proposal for wages and benefits is a very important consideration. More significantly, for companies on the competitive markets, this sort of program is essential. In these situations, the market would only be open for the small workforce. The strategy is aimed at promoting the recruiting of new workers and at maintaining existing workforce. In this sense, workers have skills that the companies are highly sought after to promote the contest among the candidates. Payments to hired workers are listed in the compensation and benefits package. Depending on several factors, employees can either be lured by these rates to stay and work harder to increase their performance or quit and seek better rates and motivation from other companies. In this assignment, we consider Yellow Leaf Software Solutions (YLSS). Though this group is relatively new on the market, its management is ready to come up with a plan that would help them obtain the best labor force in the market. The main reason for having a pay-policy mix is to encourage the employees to continue offering their services to the company on the conditions (Hansen, 2010).

A pay mix refers to the ratio of base salary against the targeted incentives, both of which give rise to the On-Target Earnings (OTE) when combined. A target incentive is the variable portion of the On-Target Earnings that relies heavily on the performance of individual employees (WorldatWork, 2015). Increased production at work, or output, automatically results in the increased variable payment for an individual. An appropriate pay-policy mix that would adequately meet the demands of Yellow Leaf Software Solutions (YLSS) is a 60/40 pay mix. This pay policy mix ensures that employees receive sixty percent of the On-Target Earnings as their basic salary, and forty percent of the On-Target Earning as the target incentive, which could as well be referred to as the variable pay.

A 60/40 pay mix is justified in that it ensures that YLSS can offer their employees attractive payment conditions, which would ultimately result in their retention. The base pay of 60% of the OTE is lucrative enough to keep an employee committed to YLSS. The additional 40% variable pay makes it even better. It is a significant part that would substantially increase a worker's final salary provided the latter shows excellent work performance (WorldatWork, 2015). The ratio in the pay mix is of great importance to any employee, given its effect on the final amount of remuneration a particular employee receives at the end of the payable working period. A pay mix of 60/40 gives YLSS workers a sustainable salary yet providing them with an opportunity to increase their compensation.

Adjustments to the base pay-policy mix proposed would mainly target to increase the variable part of the remuneration with a slight cut-down on the base one. It is true that most hired people would prefer maximizing the variable compensation to having a relatively higher base pay. It is in workers' interest to maximize their output to increase their variable bonus (Hansen, 2010). At the same time, the company would experience a significant increase in production amount. The other adjustment would be to the benefits portfolio which would involve an increase in the base salary rate with a small decrease in the bonus part. With such an approach, the employee is guaranteed a proper base payment with attractive bonus rates. Through either of these two ways, any worker would be motivated to work at YLSS hoping for a decent payment.

Public appreciation, vocational training, and paid lunches are unique intangible rewards that YLSS may implement to attract new labor force and prevent the existing one from leaving. Intangible awards are vital for motivating the workers, and substantially increase the company's performance (Hansen, 2010). YLSS can consider career development for employees, favorable working environment, and even an inspirational leadership at the helm of affairs. All this would attract qualified personnel to the company's benefit.

A job advertisement can be the following: "CAREER OPPORTUNITY!! Yellow Leaf Software Solutions (YLSS) is urgently looking for competent and qualified personnel to join our PR department. Applications are already underway and terminate two weeks from now. Kindly send your CV to our email address: [email protected] YLSS looks forward to working with you."

To conclude, the key to hiring outstanding employees with valuable skills is offering them attractive payment terms. An appropriate balance between the base pay and the benefit rates will encourage employees to engage more actively in the working process hence resulting in increased output. Payment plans are a capstone for the employment of quality workforce.


Hansen, F. (2010). Currents in compensation and benefits. Compensation & Benefits Review, 42(4), 203.

WorldatWork. (2015). The WorldatWork Handbook of Compensation, Benefits and Total Rewards. Hoboken, N.J.: Wiley.

August 09, 2021

Work Management Economy

Subject area:

Labor Employee Compensation

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